Consultant Wants CUs To Use The 'F' Word: Fees
It's really not such a bad word, after all, even if it does start with an "f" and has four letters. And for years credit
"The day of the luxury of having to not charge fees is gone," he told a packed room of about 150 people during the
The session, entitled, "You Can't Cut Your Way to Profitability Anymore," attacked some fundamentals in the
"Credit unions have always seen themselves as being different from banks because we don't charge fees," he said.
The reality is that without fees, credit unions will not thrive.
"Don't take that not-for profit thing too seriously," he said, adding that that doesn't mean credit unions have to start
Of course, there are other options that include cutting costs, but Harrington argued cost cutting has its limits.
"We have gone through a period of belt tightening," he said. "And we have done a good job. If you wanted to cut
Maybe board salaries, he joked adding, "Ha! Make them pay you to volunteer."
Harrington said there are some efficiencies every credit union should pursue, including automation of finance and
The final piece, he said, is boosting revenue.
"Revenue enhancement will not come from loan interest income or investment interest income," he said. "It will
That doesn't mean you have to go fee crazy. Harrington suggested CUs avoid fees that are an obstacle to desired
Some non-traditional sources of revenue might include credit life and disability insurance, CUSOs, website
Harrington said it even would be beneficial for more credit unions to start investigating the possibilities of offering
"It's a $1.5-billion profit industry that we should look at," he said. "While profitability is not our primary concern,
Why? It allows credit unions to provide better service to members in the way of lower loan rates, higher deposit